And that condition won't be hard to meet, according to Canada's Natural Resources Minister Joe Oliver.

Obama's surprise announcement came during a climate change speech at Georgetown University on Tuesday.

While announcing a host of measures designed to fight climate change. he added that America will still need fossil fuels to keep its economy growing.

"But I do want to be clear: allowing the Keystone pipeline to be built requires a finding that doing so would be in our nation's interest, and our national interest will be served only if this project does not significantly exacerbate the problem of carbon pollution," he added.

The $7-billion Keystone XL pipeline, if approved, would ship about 800,000 barrels of crude a day from Alberta's oilsands to refineries along the Gulf of Mexico.

Earlier this year, the U.S. State Department concluded building Keystone would result in no "substantive change in global greenhouse gas emissions," because it said rejecting it wouldn't curb development of the oilsands and that the oil would continue to be shipped to the U.S. via truck or rail or tanker — all of which are less safe and have greater emissions than pipelines.

Both opponents and supporters of the project interpreted Obama's remarks as good news for their respective sides in the debate: Environmentalists see it as an impossible standard, and supporters touted Tuesday that since alternative modes of transportation for the oil have higher emissions, Keystone is all but approved.

Oliver told reporters later Tuesday after Obama spoke that Keystone will not create a net increase in carbon emissions, and he's "comfortable the project will be approved," if the application is based on "the facts and the science."

Supporters of the project on both sides of the border claim it will create 20,000 jobs and inject billions into the U.S. economy.

Obama has repeatedly delayed making a decision on the pipeline, even rejecting it last year only to encourage TransCanada to reapply with a new route through Nebraska that avoided an environmentally sensitive aquifer.